"It is clear that this 70 billion euros of debt... is really the absolute priority," Breton told beleaguered shareholders in Paris. "We have to deal with this problem," he added, saying 15 billion euros of fresh funds were needed.

The company has been straining under a debt load of 70 billion euros, about three times the value of the company, after former Chief Executive Michel Bon spent more than 100 billion euros on acquisitions.

The French government, which has a 56.5 percent stake in the telecom operator, has said it is willing to give up majority control and promised to pump 9 billion euros into the former phone monopoly, as part of the company's strategy to tap investors for more money.

The company has already outlined plans to cut debts by 30 billion euros over the next three years. Breton also said on Tuesday the company would boost earnings before interest, tax, depreciation and amortisation to above 20 billion euros by 2005.

France Telecom's stock, which has slumped about 90 percent from their peak in 2000, fell 5.7 percent to 19.67 euros in mid-afternoon Paris trading on Thursday. Its stock is worth a fraction of its October 1997 floating price of 27.75 euros.

"Given the current environment, if you want to raise capital in the next 18 months, you should go as soon as you're ready," one industry expert told Reuters, adding the French group would be unwise to risk political turbulence -- war with Iraq and global stock market jitters -- derailing its plans.

Britain's BT Group and Dutch carrier Royal KPN have already approached shareholders for additional funds to reduce their debt and are now turning around businesses and profitability.